Quarterly Summary
2Q 2025 was marked by oil price volatility, with Brent oil prices dipping as low as US$60/bbl and a high of US$80/bbl, averaging US$68.1/bbl across the quarter, down 10.2% from the 1Q 2025 average. The decline in oil prices was primarily driven by continued uncertainty over global trade tariffs, reaching a low in May. The short peak to US$80 meanwhile came in June 2025, during the conflict between Israel and Iran. Demand in the quarter was relatively robust with China’s crude imports rising year-on-year, and US refinery runs outpacing 2024 levels. On the supply side, OPEC+ announced a faster rollback of its 2.2 mmbpd voluntary cuts. However, due to overproduction compensation requirements, only 567 kbpd was added between March and June—well below the planned 960 kbpd. As a result, full unwinding is now expected by year-end.
At the end of 2Q 2025, Westwood revised its global rig demand outlook upward from the 1Q 2025 outlook, forecasting a YoY growth to 4,596 rigs in 2029, an increase in expectations of 2.5% from 1Q. This upwards adjustment was seen across every year of the forecast, including 2025 where rig demand is now expected to average 4,343 rigs, up 2% from an expectation of 4,269 rigs in 1Q 2025. This reflects a softened view on both the short-term and long-term impact of US trade tariffs, as well as strong results from several rig contractors. Demand for high-spec rigs (1,500 HP+) in the US is expected to grow YoY, albeit remaining below the spike experienced in 2022. Strong growth in high-spec rigs is also expected in key markets including Argentina, China and the Middle East, driven by operators targeting deeper and more complex reservoirs. However, the updated forecast still falls 5% short of the 4,842 rigs projected by 2029 in the 4Q 2024 edition, reflecting an overall decline in sentiment, as well as lower expectations for drilling in regions such as Asia and Latin America.
4Q 2024-2Q 2025 Rig Demand Expectations
Source: Westwood Global Land Drilling Rigs
Key events covered in the 2Q 2025 edition of the newsletter include the award of three separate land rig contract awards to Abraj Energy Services in Oman from BP, ARA Petroleum and Petroleum Development Oman. While there were also a significant number of M&A deals during the quarter, led once again by activity in the US, with the most notable deal being Viper Energy’s US$4.1 billion acquisition of Sitio Royalties.
This edition also contains detailed information on global oil and gas drilling, licencing and field development activity, including details on exploration licences awarded for 28 blocks across Algeria, China, India and Pakistan as well as discoveries announced in Saudi Arabia, Egypt and China.
Coverage on Geothermal activities has been expanded in this edition of the newsletter, with dedicated tables for Geothermal Licencing and Field Development Activities, as well as a full Geothermal Drilling Activity subsection. Westwood recognised the need to provide a deeper analysis of occurrences in the geothermal market thus the newsletter features stories such as the completion of Strataphy’s 25 shallow geothermal well drilling and testing campaign in Saudi Arabia and GSM Branco’s award of a four well geothermal drilling contract in Mexico.
Ben Wilby
Manager, Onshore Energy Services
[email protected]
Michela Francisco
Research Analyst, Onshore Energy Services
[email protected]
